Ministers plan to end the imposition of custodial sentences for non-payment of council tax and use powers to seize cash from non-payers' accounts instead.

John Healey, the local government minister, said he would be consulting on switching enforcement of council tax payment so that people who refused to pay were no longer dealt with by magistrates courts. Instead, the tax would be enforced by the county court.

The change means that debt will be recovered by freezing an account or seizing cash from an account in the same way as non-payment of rent or on credit cards is enforced. More than £600m of council tax went uncollected last year.

The change would save ministers the political embarrassment of seeing council tax opponents go to prison in a blaze of publicity. In 2005, 368 people went to prison for not paying council tax and a further 335 were committed to prison but did not serve a sentence, often because they changed their minds and decided to pay, or the council felt too embarrassed to put a protesting pensioner behind bars.

On occasions, councils have written off debts when a pensioner, for instance, has protested at a council's failure to provide decent services.

The Ministry of Justice, which is desperate to reduce Britain's prison population, is likely to support the measure.

While councils are doing better on collection, there are still people who do not pay their council tax bills.

Healey told the Local Government Association's annual conference: "Each year there are also some who can pay but won't pay. This is not fair to the vast majority who play by the rules and pay what's due. And it prevents councils putting this money into public services."

Eric Pickles, shadow local government spokesman, said: "This is an admission by Labour that more and more people are failing to pay their extortionate council tax bills as the soaring cost of living bites. Whilst we never condone breaking the law, under Labour council taxes have doubled and ministers have raided the pockets of some of the most vulnerable groups."